Congress Boosts Sanctions—Which Are Working—But President Gets to Roll Them Back Selectively

President Barack Obama holds a Cabinet meeting in the Cabinet Room of the White House, July 26, 2012.

Congressional negotiators have settled on a bill enhancing Iran sanctions, and President Obama announced new sanctions targeting fronts for Iran.

“This bipartisan, bicameral Iran sanctions legislation strengthens current U.S. law by leaps and bounds,” Rep. Ileana Ros-Lehtinen (R-Fla.), the chairwoman of the U.S. House of Representatives Foreign Affairs committee and a chief sponsor of the bill, said in a statement released Monday after House and Senate negotiators finalized the legislation.

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“It updates and expands U.S. sanctions, and counters Iran’s efforts to evade them,” Ros-Lehtinen said. “The bill sends a clear message to the Iranian regime that the U.S. is committed, through the use of sanctions, to preventing Iran from crossing the nuclear threshold.”

Obama administration officials likely will cite the enhanced sanctions bill, due to pass both houses in its final version before week’s end, in their efforts to persuade Israel not to take military action against Iran in the coming months.

But the Obama administration, with backing from Senate Democrats, managed to roll back some provisions backed by the House and Senate Republicans.

Under the final version, for instance, the president has considerable leeway to postpone sanctions on insurers in order to give them time to comply.

Also omitted from the final version are sanctions that congressional hard-liners had sought on individuals associated with SWIFT, the Society for Worldwide Interbank Financial Telecommunications, as long as the body continues to deal with Iran’s central bank.

Obama administration officials in a conference call with reporters would not commit to signing the bill or endorsing all its facets, but said they were “optimistic” about working with Congress to continue isolating Iran.

Ehsan Mehrabi reported in insideIRAN.org (Report from Tehran: How Sanctions Hurt the Lives of Ordinary Iranians) that the sanctions are having a significant effect on the lives of most Iranians. Razie Sadeghi, an economic journalist who is in regular contact with the country’s economic officials, told Mehrabi that Iranian officials believe declining oil revenues as a result of the sanctions on the Central Bank and the country’s oil sector “could deliver a big blow to Iran’s economy.”

Mehrabi points out that one of the consequences of the sanctions has been the refusal of many companies to sell auto parts to automobile companies in Iran. He cites a 36% reduction in car manufacturing in the country, “which can have unpredictable consequences in regards to labor unrest.”

According to Mehrabi’s report, the majority of people blame Iran’s leaders and believe that the government’s insistence on carrying out the nuclear program is the cause of the economic problems. Nonetheless, he believes that ultimately these sanctions will hurt the people more than the regime.

CBS News reported earlier this week that financial sanctions and oil embargoes imposed upon Iran by the international community are having an effect upon Tehran’s ballistic missile program, with experts saying Iran’s ability to develop and build missiles capable of striking targets in Western Europe and beyond has been significantly impeded.

On Monday, U.S. Defense Secretary Leon Panetta said the sanctions are having a “serious impact” on the Iranian economy, even if their results may not be immediately obvious.

Panetta’s comments come just a day after US President Barack Obama’s Republican challenger Mitt Romney, during his trip to Jerusalem, backed Israel’s right to attack Iran’s nuclear program.

In a separate move on Tuesday, Obama introduced new sanctions that target fronts for Iranian entities already subject to sanctions.

The new sanctions, Obama said in a statement announcing his executive order, are “authorized for those who may seek to avoid the impact of these sanctions, including against individuals and entities that provide material support to the National Iranian Oil Company, Naftiran Intertrade Company, or the Central Bank of Iran, or for the purchase or acquisition of U.S. bank notes or precious metals by the Government of Iran.”

Singled out for citation were the Bank of Kunlun in China and Elaf Islamic Bank, for having “facilitated transactions worth millions of dollars on behalf of Iranian banks that are subject to sanctions for their links to Iran’s illicit proliferation activities.”

“By cutting off these financial institutions from the United States, today’s action makes it clear that we will expose any financial institution, no matter where they are located, that allows the increasingly desperate Iranian regime to retain access to the international financial system,” Obama said in his statement.